Text | Mutual Chain Pulse · Liang Shan Hua Rong
Mutual chain pulse: Although Bakkt has not been able to detonate a new round of bull market, it has far-reaching implications for the cryptocurrency futures contract market.
As the first physical settlement bitcoin futures trading platform approved by US regulators, Bakkt will play a key role in attracting more traditional institutions, capital admissions, and revitalizing the entire cryptocurrency futures trading market.
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But on the other hand, this year, more and more cryptocurrency exchanges began to “snap” the futures contract market cake. Not only did the original stock exchanges have launched futures contracts, but many newly established exchanges also began to try to break through futures contracts, trying to break through and then come on.
What impact will Bakkt bring on the cryptocurrency spot and futures contract market, and will it impact the current cryptocurrency exchange futures contract business? What kind of ending will the cryptocurrency exchange "mixed" futures contract market be?
Mutual Chain Pulse invites cryptocurrency exchanges such as Coin, OKex and Matcha to discuss how Bakkt will affect the cryptocurrency futures contract market.
How will Bakkt go online to impact the futures contract market?
Mutual Chain Pulse: What effect does Bakkt officially open trading on the spot and futures trading of major exchanges?
The Coin Research Institute team: Bakkt essentially adds a compliant legal currency entry and trading platform for bitcoin and subsequent digital assets. Through this type of platform, physical bitcoin trading products can be quickly and directly pushed to customers in the hands of traditional American brokers. How high is the overlap between these customers and the existing “currency” exchanges? According to some surveys, there may be 30% to 50% of cryptocurrency investors who have experience in market investment such as traditional stock futures. The simple estimate of the impact on the stock market may be between 30% and 50% (ie, assuming overlapping investors) All turn back to the traditional platform transaction), but for those new users who have no investment experience for both, the factors that choose their choice may not be the official endorsement, but the product marketing, experience, threshold and other factors, and now There are also "coin circle" exchanges that are gradually cooperating with supervision to obtain licenses, and the advantages of Bakkt will become less and less obvious in the future.
OKex Chief Industry Researcher Kong Deyun: I think Bakkt will have two effects on the line: First, the issue of traditional funds entering the market, Bakkt is currently licensed by the US Commodity Futures Trading Commission (CFTC), and its on-line futures products are regulated. Only the traditional institutional funds that meet the requirements of regulatory requirements can have large-scale inflows.
Second, to prevent market manipulation problems, many people think that the advantage of Bakkt physical delivery is that it can prevent market manipulation. In fact, physical delivery can only prevent unlimited short-selling, but it still cannot prevent large-scale shorting. On the contrary, speculators have added a means of market manipulation, that is, to “crowd out” short positions by means of spot “hoarding” before the delivery, thus raising the price of futures contracts. These manipulations often appear in the history of the real-time delivery of the futures market, the most famous of which is the "Hunt Brothers Silver Manipulation Case". Mutual chain pulse: In the long run, trading platforms with official endorsements such as Bakkt will be launched one after another. Will it impact the futures contract business of cryptocurrency exchanges?
Davie S: Bakkt, the head of the Matcha Futures, officially opened the deal, which will have an impact on the current cryptocurrency exchange business, but the impact is small. Bakkt's target customers should be institutional customers, not the same as the customer portraits of major exchanges in the current market. The official opening of Bakkt is a good thing for the industry, and more and more institutions are involved in the industry to enrich the industry's ecology.
Senior Operations Manager of a large exchange: Bakkt is aimed at institutional clients. The contract logic is completely different from the cryptocurrency exchanges such as Firecoin or Coin. The participants and potential participants of the Bakkt futures contract are completely complete with Firecoin and Okex. different. So at this stage, Bakkt and the exchanges such as Firecoin and OKex have not yet competed directly. Inter-Chain Pulse: Previously, including the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME), the Bitcoin futures trading products were launched. What is the biggest difference between Bakkt and them?
Coin's Research Institute team: Bakkt's products mainly include physical delivery, which means that CBOE and CME, which do not contain physical delivery futures products, will not affect the price of bitcoin in the spot market in theory, and will not give bit. The currency brings incremental funds and will not bring selling pressure to Bitcoin.
Bakkt is different. Its products are connected with physical bitcoin and funds. Unlike CME, the settlement price of Bakkt's futures products is not quoted on any existing digital currency exchange. If the future transaction volume is large enough, it will become a real thing. Bitcoin pricing center.
Kong De, chief industry researcher at OKex: First, the timing of the birth of the two is different. CBOE and CME were born at the end of 2017, which is in the midst of a big bubble in the digital currency; another difference is that Bakkt is delivered in kind rather than in dollars. The main reason for the sluggish trading volume is that the target users of Bakkt are mainly financial institutions, but financial institutions currently seem to be less interested in the encrypted digital currency or are in the wait-and-see period.
And we can also see from Bakkt's contract product design that it is not very friendly to small and medium investors – Bakkt's contract value is 1 bitcoin, about 10,000 US dollars; while BitMEX has a face value of 1 US dollar, OKEx has a face value of 100 US dollars. Small and medium investors obviously prefer the latter.
Daviee S , head of matcha exchange futures: CBOE, CMC and other futures products are mainly cash delivery, Bakkt is physical delivery, need to hold coins. Mutual chain pulse: CBOE bitcoin futures trading has been suspended due to low trading volume. Does Bakkt also have the possibility to step into CBOE?
Kong De, chief industry researcher at OKex: Bakkt is unlikely to be called, but can focus on whether Bakkt has the possibility to iterate towards a more friendly retail.
Davie S, head of matcha exchange futures: I am optimistic about the development of Bakkt and are unlikely to follow the footsteps of CBOE.
Senior Operations Manager of a large exchange: At this stage, everything is hard to say. It can only be said that the current contract volume of Bakkt is still very unsatisfactory, far less than the CTC BTC contract, but if there is only the previous two days of trading volume, this product Certainly unsustainable.
Exchange "mixed war" futures final: very few oligarchs will monopolize the market
Mutual chain pulse: From OKex, fire coins to currency security, many second- and third-tier exchanges have launched online futures contract platforms. What impact will the exchange “mixed” futures contract market have? What will the final outcome of "Melee" look like?
Kong De, chief industry researcher at OKex: The exchange "mixed war " is a good thing, which will make the whole market more compliant and fair. For example, most of the previous exchange price references are from a certain exchange. The consensus in the futures market is that everyone is based on the mark price formed from many mainstream exchanges. This is an improvement. But whether it is spot or futures, the final standard to consider is the liquidity and depth of the market. Therefore, it is a market that is easy to form the Matthew effect. It will certainly be more or less, and ultimately it will be a very small number of oligopoly.
Senior Operations Manager of a large exchange: Firecoin took the lead in this competition, and most new visitors were not successful. Only exchanges with solid financial product design capabilities and designed products that are stable and in line with market demand will win in the next competition.
Don't pay too much attention to existing contract products, and the product model of existing contracts is mature. An exchange that wants to succeed in the contract market needs to score high on product design and sales. New players can only make a breakthrough in product design to threaten existing players.
Davie S., head of Matcha Futures: The melee is a good thing, and the market is competitive, which will promote the development of the industry. However, the current market contract products are highly homogenized and require more innovation. The final result of the melee will result in an oligarch, a large flow, a good product, and a strong exchange will occupy the majority of the market. Mutual chain pulse: From the perspective of the exchange, what are the problems that need to be solved in the current development of the cryptocurrency futures contract market?
Kong De, chief industry researcher at OKex: The most important thing in the futures market is to do more education for spot users, and then achieve the goal of allowing more spot users to convert to contract users. Education is to let more people realize that futures is not only a speculative tool, but also a risk management tool. The method and purpose of the tool depends on the person who ultimately uses it.
For speculative people, the contract is a highly leveraged speculative tool that can magnify positions and gains (speculative users); for those who want to use contracts for arbitrage (contract/spot), the contract is a contract A market with relatively stable profits (arbitrage users) can be provided; for risk managers, a contract is a risk management tool (hedge hedge users). From the perspective of market health, the more the purpose of trading users, the more active the market transactions, the more effective the market, the healthier the entire market.
The Coin Research Institute team: If the spot transaction is to realize the “cross-space” exchange between goods and funds, then the futures realize the exchange of “cross-time” and “cross-space” between the two. The traditional futures derivatives market can do more than the spot market, mainly based on the real consumption demand of commodities, while the current “just-needed” scenario of encrypted assets is relatively small, and the leveraged futures products except for a small amount of hedging demand for the mining industry ( This is not a scenario that requires high-volume mass trading, and more is used for speculative trading. Therefore, if you can't extend the use of encrypted assets, this market can easily hit the ceiling.
Senior Operations Manager of a large exchange: From the perspective of the contract market, the contract market has developed very mature and perfect. The next competition is not in the contract market, but in new derivatives. For example, options, volatility products, etc., and whether an exchange can provide excellent products for its customers is the key to determining the outcome.
Davie S., head of matcha exchange futures: I think there are two main problems: First, the exchange system problems must be solved, and the performance conditions for dealing with extreme market conditions must be met. Second, the problem of product homogenization should be solved, and there must be more and more differentiated products to enrich the market.
Competitive landscape: First-tier exchanges are stable, and latecomers still have opportunities
Mutual chain pulse: What changes will occur in the competitive landscape of the exchange futures contract market in the next 1-2 years? What is the position of your exchange?
Kong De, chief industry researcher at OKex: I believe that the contract exchange will be and will eventually be dominated by a handful of oligopoly. At present, OKEx and Bitmex are both the first echelon. And OKEx has accumulated many successful experiences in various aspects of the technical product development, trading and risk system of the contract, and established a demonstration benchmark for the industry, so that new entrants can rely on it.
In addition, in the past few years, OKEx and BitMex have completed the education of early users in the contract market, which has cultivated users' awareness of contract products to a certain extent and lowered the user education threshold of the new trading platform. Whether it's BitMex, which has been focused on the contract market for many years, or OKEx, which has the capabilities of leading contract technology products, their absolute leading position in the contract market has not been shaken by the regular army's admission.
Senior Operations Manager at a large exchange: Firecoin's position on contract products has been very solid, but the bigger threat to fire coins now is not the existing contract products, but the diversion of new derivatives to contracts.
Davie S., head of matcha exchange futures: The exchange with official endorsements will rise, and after the futures contract market is fully competitive, there will be oligarchy. Matcha trade is so innovative, using its own advantages, innovation, in the future of the derivatives market must have a broad stage of matcha. This article is [inter-chain pulse] original, reproduced please indicate the source!